Question

I purchased a hair-dryer for Rs $5,400$ including $8$ % VAT. Find the price before VAT was added.

Answer 1

The price includes VAT.
Thus, $8$ % VAT means that if the price without VAT is Rs $100$,
then price including VAT will be $Rs$ $108$.
When price including VAT is $Rs$ $108$, original price = $Rs$ $100$
When price including VAT is $Rs$ $5400$
$original \;price$ = $Rs$ $\bigg(\frac{100}{108} × 5400\bigg)$
= $5000$

Thus, the price of the hair-dryer before the addition of VAT was $Rs\; 5,000$.